Europe stocks close down as RBS and Renault weigh

European shares closed lower on Friday as investors reacted to earnings news from the Royal Bank of Scotland and Renault, and continued to weigh up the prospects of a withdrawal of stimulus by the U.S. Federal Reserve. The pan-European FTSEurofirst 300 Index provisionally closed down 0.3 percent at 1,288.67 points.

The U.K. lender, which has been 81 percent owned by the British taxpayer since its rescue in 2008, will ring-fence £38 billion ($60.9 billion) of bad assets. It said the restructuring will free up between £10 billion to £11 billion of capital. Shares closed down 7.4 percent.

Renault also fell on earnings news, closing down nearly 5 percent after its Japanese partner Nissan cut its profit outlook.

China manufacturing picks up

Investors in Asia digesting two separate readings of Chinese factory activity for October on Friday. China's official purchasing manager's index (PMI) rose to 51.4 from 51.1 in September, beating Reuters' estimate of 51.2.

Frederic Neumann, co-head of Asian economic research at HSBC said the broad message was that China's economy was still holding up, but not exactly red hot.

"It's good enough for the time being. The third quarter may have been the peak [for growth], we're going to go sideways into the fourth quarter. Next year, we expect a renewed deceleration but this is as good as it gets for the time being," he said in a research note.

In other stocks news, U.K. airports parts supplier Meggitt lowered its revenue expectations for the full-year, after weak trading in the last four months. Shares closed down by around 11 percent.

Shares of Air France-KLM closed down 3.8 percent after it demanded an overhaul of struggling Italian airline Alitalia — in which it owns a 25 percent stake — before it subscribes to a capital increase.